Taking Responsibility for Our Historic Impacts

We continued with a program that has been under way for more than 20 years to voluntarily remediate former PG&E or PG&E-predecessor company manufactured gas plant (MGP) sites. In the mid-1800s and early 1900s, before natural gas was available as an energy source, about 1,500 MGPs were located in cities and towns across the country. MGPs used coal and oil to produce gas for lighting, heating and cooking. With the arrival of natural gas in the 1930s, most of the MGP sites in PG&E's service area were closed and the properties were put to other uses.

Of the 41 MGP sites historically owned or operated by PG&E in the early- to mid-1900s, 33 have been or are in the process of being remediated. One example is PG&E's Watsonville Service Center, located in a mixed-use residential and industrial community. During 2008-2009, crews removed approximately 43,500 tons of soil impacted from historical utility operations, including a steam generation facility and an MGP. In keeping with our corporate environmental justice policy, PG&E worked closely with community leaders and neighborhood advocates throughout the project to share project details with the community and respond to questions and concerns.

Working under close regulatory oversight, PG&E took numerous steps to protect public health and safety, including effectively managing approximately 150,000 gallons of storm water during significant rain events. After more than 50 regulatory and agency inspections, no violations or concerns were reported. PG&E also hired 10 percent of the field crews locally and used diverse suppliers for 25 percent of the work.

Work at the remaining MGP sites is being initiated in 2010, including three sites in San Francisco and a site in Napa, as well as sites in Modesto, Woodland, Oroville and Fresno. Using today's technology, PG&E is working with state agencies and independent experts to design a complete and efficient testing program for these sites to ensure that any potential impacts from former MGPs are addressed in accordance with today's regulatory standards.

In 2009, PG&E also piloted a "green" remediation program with the California Department of Toxic Substances Control (DTSC), helping to develop a framework for applying sustainability principles to remediation efforts. At the Watsonville MGP project, this included limiting truck idling, rerouting truck traffic away from homes and the local daycare, hiring local labor and using low-emission construction equipment. It also included working collaboratively with our neighbors and surrounding communities to communicate proactively and respond to their concerns, consistent with our corporate environmental justice policy.

In 2010, PG&E and DTSC will continue the partnership developed during the green remediation pilot program. For example, we are incorporating sustainable principles into initial project planning and community outreach activities associated with work at the former MGP site in San Luis Obispo. This project, in conjunction with the pilot, will help PG&E recognize opportunities to improve sustainability performance at other remediation projects.

Our investigation and cleanup efforts continue to make progress at the company’s Topock natural gas compressor station.PG&E’s Topock Compressor Station is located in San Bernardino County about a half mile from the Colorado River. Consistent with industry practice at the time, hexavalent chromium was used at Topock in the cooling towers in the 1950s and 1960s to prevent corrosion. Beginning in 1951 until 1964, untreated wastewater from the cooling towers was discharged into a nearby dry wash. Over time, the discharged hexavalent chromium contaminated the groundwater aquifer. PG&E is working cooperatively with state and federal regulators and other interested parties to assess the extent of contamination and clean up the groundwater. Ongoing monitoring programs continue to show no presence of hexavalent chromium in the Colorado River.

In early 2004, in response to detections of chromium near the Colorado River, state regulators required PG&E to construct and operate an interim protective measure to hydraulically control the affected groundwater so it cannot move toward the Colorado River. Initially, this interim measure consisted of wells to extract groundwater near the Colorado River, which was transported off-site for disposal. In July 2005, PG&E expanded the interim measure to include a groundwater treatment plant, which cleans the extracted groundwater so it can be re-injected into the local groundwater aquifer. Over the past six years, the interim measures have extracted nearly 350 million gallons of contaminated groundwater and removed over 6,000 pounds of chromium from the environment.

In 2009, in cooperation with state and federal agencies and other stakeholders, PG&E submitted a Corrective Measures Study/Feasibility Study that evaluated a range of alternative remedies to clean up the groundwater at the site. Each of the alternatives was evaluated using federal and California criteria for remedy selection, and PG&E proposed a preferred alternative based on that evaluation. This study was approved by state and federal regulators in December 2009. The state will prepare an Environmental Impact Report and state and federal agencies will jointly seek public comment on their proposed remedy in the summer of 2010. We anticipate that a final groundwater remedy will be approved in late 2010.

PG&E also continued to work with agencies and interested parties in 2009 to complete the characterization of soils within and around the compressor station and to expand the understanding of groundwater conditions in less studied portions of the site. Soil investigations revealed high levels of contaminants in a steep ravine just south of the compressor station. In 2009, as directed by federal agencies, PG&E began removing contaminated fill and debris from this area. We expect to complete this project later this year.

We also continue to work closely with the local Indian tribes to ensure that they have the ability to meaningfully participate in the remedy-development process, consistent with PG&E's environmental justice policy. We have entered into written agreements with three local tribes—the Fort Mojave Indian Tribe, the Colorado River Indian Tribes and the Hualapai Tribe—that provide for reimbursement of certain costs incurred by the Tribes in connection with the Topock cleanup. In addition, through the Topock Leadership Partnership, PG&E meets periodically with leaders from state and federal agencies, tribes and other stakeholders to discuss the project and seek input on its future direction.